Legislative analysts: New Jersey surplus shrinking; OLS projects slightly higher revenue than executive for FY25–26

Trenton — The Office of Legislative Services told the Assembly Budget Committee that New Jersey’s sizable surplus is eroding because recurring expenditures now outpace recurring revenue, and that the state could face near depletion of reserves by the end of fiscal 2028 if current trends continue.

In testimony to the committee, Thomas Cohen of the Office of Legislative Services said the surplus would be “down to a couple hundred million by the end of fiscal 28” under current assumptions and that the state’s fiscal path “raises concerns about the sustainability” of reserves. Oscar Mendez, a revenue and economic policy analyst, presented the OLS revenue forecast and said OLS’s estimates for fiscal 2025 and 2026 are modestly higher than the executive branch’s projections.

Why it matters: Lawmakers must write a balanced budget each year. OLS’s forecast gives legislators a different near‑term revenue picture than the executive’s and underscores how a combination of slow revenue growth, continued spending increases and possible federal funding cuts (especially to Medicaid) could force policy changes or use of one‑time resources.

OLS figures and highlights - OLS projects fiscal 2025 general fund revenue at about…